Real Estate - South Africa

South Africa

The Real Estate market market in South Africa is expected to reach a value of US$1.23tn in 2024.
Within this market, Residential Real Estate holds the dominant position with a projected market volume of US$0.86tn in the same year.
It is anticipated that the market will experience an annual growth rate of 3.66% (CAGR 2024-2028), resulting in a market volume of US$1.42tn by 2028.
In comparison to other countries, China is projected to generate the highest value in the Real Estate market market, with an estimated worth of US$135.70tn in 2024.
South Africa's real estate market is experiencing a surge in demand for affordable housing due to government initiatives and urbanization.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in South Africa is experiencing significant developments and trends that are shaping the industry. Customer preferences, local special circumstances, and underlying macroeconomic factors are all contributing to the growth and evolution of the market. Customer preferences in the South African Real Estate market are shifting towards more sustainable and eco-friendly properties. There is a growing demand for green buildings that utilize renewable energy sources and incorporate environmentally friendly features. This trend is driven by increasing awareness of climate change and a desire to reduce carbon footprints. Additionally, customers are seeking properties that offer modern amenities and convenient access to transportation, shopping centers, and recreational facilities. The demand for these types of properties is driving developers to incorporate these features into their projects. Trends in the South African Real Estate market also include a rise in mixed-use developments. Developers are increasingly combining residential, commercial, and retail spaces within a single project. This trend is driven by the need for convenience and accessibility, as people seek to live, work, and shop in close proximity. Mixed-use developments also contribute to urban revitalization and can help create vibrant and inclusive communities. Local special circumstances in South Africa, such as a growing urban population and a housing backlog, are also influencing the Real Estate market. Rapid urbanization has led to an increased demand for housing, particularly in major cities. The government is implementing various initiatives to address the housing shortage and promote affordable housing options. These efforts, coupled with private sector investments, are driving the development of new residential projects. Underlying macroeconomic factors are also playing a role in the development of the South African Real Estate market. Economic growth, low interest rates, and favorable government policies are creating a conducive environment for investment in the sector. The government's commitment to infrastructure development and urban regeneration projects is attracting both domestic and foreign investors. Additionally, the rise of the middle class and increasing urbanization are contributing to the demand for housing and commercial properties. In conclusion, the Real Estate market in South Africa is evolving to meet the changing preferences of customers and adapt to local special circumstances. The demand for sustainable and mixed-use developments, coupled with government initiatives and favorable macroeconomic factors, are driving the growth and development of the market.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.